PARAMARIBO, Suriname – Government will introduce a temporary “subsidy discount” on the price of diesel and unleaded gasoline to help cushion the blow of the increased fuel price on the international market.
The final subsidy amounts and related fuel prices will be determined by Friday.
The government said the financing of the subsidies is linked to the extra income from the payments of state-owned oil company Staatsolie, which has seen higher revenues due to the higher international price of oil.
The proposed subsidy system which will be introduced is based on object subsidies and is expressly intended as a temporary measure, the government said.
Object subsidies are constructed to improve a recipient’s access to a particular product or service while subject subsidies are specific to particular beneficiaries.
Noting that the disadvantage of the object subsidy system is that everyone receives the subsidy, including individuals and entities who are not actually entitled to it, thereby increasing the risk of cheaper fuel being smuggled to neighbouring Guyana and French Guiana, the government said it is in the process of stepping up border controls.
It added that the object subsidy will eventually be replaced by a more effective system based on subject subsidies, during the course of the year.
As a result of the Russia-Ukraine war, the oil price on the world market has risen sharply, currently hovering around US$100 to $110 per barrel after reaching a record US$130 per barrel last month.
The price of fuel products in Suriname is adjusted every month based on that price.
The government said the rising fuel costs internationally come at a time when Suriname’s economy has stabilised and purchasing power is recovering. (CMC)